NARCL recovery tally rises to ₹4,192 crore as resolution gains pace

Government-backed bad bank sees sharp rise in resolution pace, acquires Rs 1.62 trillion in stressed debt

National Asset Reconstruction Company (NARCL) — the government-backed bad bank — has significantly increased resolution, with recoveries more than doubling to ₹4,192 crore, or 13.66 per cent of total acquisition, between April and October of 2025-26, according to sources aware of the development.

 

“The total recovery amount increased from ₹1,981 crore (6.79 per cent of total acquisition) at the beginning of the financial year on April 3, 2025, to ₹2,410 crore (8.18 per cent of total acquisition) by July, before more than doubling to ₹4,192 crore as of October 31, 2025,” said the source.

 

NARCL has been set up to clean up legacy stressed assets with an exposure of ₹500 crore and above in the Indian banking system. The company offers adaptable acquisition structures comprising an optimal mix of cash and security receipts, to the selling banks and financial institutions across sectors and geographies. NARCL’s acquisition processes are administered under its financial asset acquisition policy, framed under extant guidelines for asset reconstruction companies (ARCs).

 

The source further added that NARCL has continued to make steady progress in the acquisition of stressed assets, with aggregate debt exposure acquired rising to ₹1.62 trillion as of October 31, 2025. Aggregate debt exposure stood at ₹1.56 trillion in April 2025 and inched up to ₹1.57 trillion by July, reflecting a gradual but consistent increase over the period.

 

“In terms of acquisition value, NARCL had acquired stressed loans worth ₹29,162 crore as of April 2025, which increased to ₹29,437 crore by July and further to ₹30,668 crore by the end of October,” the source added.

 

However, the number of accounts acquired also rose during the period, increasing from 26 in April to 27 in July and reaching 29 accounts by October 31, 2025.

 

“Redemption from resolved assets has also improved steadily, rising from ₹1,835 crore in April to ₹2,209 crore in July and further to ₹3,839 crore by October-end,” the source added.

 

Earlier, a committee was formed under the chairmanship of the State Bank of India to identify additional stressed assets. These assets could either be transferred to NARCL or handled by any other ARC via the Swiss Challenge.

 

The Swiss Challenge process is a transparent bidding method used by entities such as NARCL to maximise value from the sale of stressed assets. It begins with an initial bid from an anchor bidder, which is then made public to invite competing offers. If a higher bid is received, the original bidder has the right to match it. If the original bidder does not do so, the asset is sold to the highest bidder. This method ensures fair competition, prevents undervaluation, and helps banks recover more from bad loans.

 

“Government continues to advise public-sector banks (PSBs) to adopt a more aggressive approach on the recovery front to improve asset quality. PSBs have also been asked to step up recoveries, leverage digital platforms such as BaankNet for faster and more transparent resolutions, and maintain a strong focus on strengthening early warning systems,” the source said.

 

The revamped property e-auction platform of PSBs, BaankNet, has considerably enhanced the recovery of stressed assets, almost trebling the average annual successful bid value to ₹15,731 crore during the 12-month period up to June this year, compared with ₹5,267 crore garnered through the earlier eBkray portal during the corresponding 12-month period up to June 2024.